Building a strong Social Security retirement

These days, everyone is taking a new look at their finances and no one is looking more closely than the millions of people who are nearing retirement age. While some expected to retire at one of the traditional milestones, such as age 62, the current economy is forcing many of them to re-evaluate their plans.

Social Security is the foundation for a secure retirement, but was never intended to be your only source of retirement income. While Social Security replaces about 40 percent of the average worker's pre-retirement earnings, most financial advisors say that you will need 70 percent or more of pre-retirement earnings to live comfortably.

Social Security's online retirement estimator provides immediate retirement benefit estimates. You can key in some basic information and get a quick and accurate estimate of your benefit amount using different scenarios. The retirement estimator gives estimates based on your actual Social Security earnings record. To use the retirement estimator visit www.socialsecurity.gov/estimator.

If you choose to start receiving benefits early, the monthly payments will be reduced based on the number of months you receive benefits before you reach your full retirement age. The rate of reduction will depend on the year you were born. For example, those born between 1943 and 1954 receive a maximum reduction of 25 percent. The amount you receive when you first get benefits sets the base for the amount you will receive for the rest of your life. We pay widow's or widower's benefits based on a percentages of the deceased worker's benefit amount; so your choice to take a reduced benefit, may affect your survivor.

If you wait until your full retirement age, your benefits will not be reduced. If you choose to delay retirement, your benefit will increase up to eight percent a year from your full retirement age until age 70. However, there is not additional benefit increase after you reach age 70.

Once you know just what to expect from Social Security in retirement, there are tools to help determine if you will have enough money to live comfortably when you retire. An excellent resource is the Ballpark Estimator at www.choosetosave.org/ballpark. This online tool take the ocmplicated issues, like projected Social Security benefits and earnings assumptions on savings and turns them into language and mathematics that are easy to understand. And the www.mymoney.gov website creates an online point of access to financial information from 21 federal agneices, departments and bureaus.

Filing on-line for your retirement

Social Security offers an online retirement application that you can complete in as little as 15 minutes. It's so easy. Better yet, you can apply from the comfort of your home or office at a time most convenient for you. There's no need to drive to a local Social Security office or wait for an appointment with a representative.

In most cases, once your application is submitted electronically, you're done. There are no forms to sign and usually no documentation is required. Social Security will process your application and contact you if any further information is needed.

If you are applying for retirement benefits, there are certain Social Security "basics" you should know. The most important one is knowing your "full retirement age." Depending on your date of birth, it may be between age 65 and 67. This could affect the amount of your benefits and when you want the benefits to start.

You may start receiving benefits as early as age 62. However, your monthly benefits will be reduced if you start them any time before "full retirement age."

If you elect to receive benefits before you reach full retirement age, you should understand how continuing to work can affect your benefits.

You should also be aware that credits may be added to your benefits if they start after your full retirement age.

If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70 or any age in between.

Some of the things you should think about before you decide include:

How long you think you will receive benefits.

Your health.

Whether anyone else in your family can get benefits on your record..

You can apply online for retirement benefits or benefits as a spouse if you are at least 61 years and 9 months old and

your are not currently receiving benefits on your own Social Security record;

If you are within 3 months of age 65, your retirement application will include Medicare benefits. If you do not want to start receiving retirement benefits yet there is an application for that. However, if you have a Health Savings Account (HSA) and/or health insurance based on current employment, you may want to ask your personnel office or insurance company how signing up for Medicare will affect you.

Once the Social Security Administration receives your application, they'll review it. After the review, they will contact you if they need more information or if they need to see your documents. They will also let you know if. you may be able to receive benefits on another person's record, such as your spouse or other family members that may be able to receive benefits on your work record.

When they have all of the necessary information and documents, they'll process your application and send you a letter about their decision in the mail.

about medicare

Medicare is our country's health insurance program for people age 65 or older. Certain people younger than age 65 can qualify for Medicare, too, including those who have disabilities, permanent kidney failure or amyotrophic lateral sclerosis (Lou Gehrig's disease).

The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. You may buy a Medicare supplement policy (called Medigap) from a private insurance company to cover some of the costs that Medicare does not.

Medicare is financed by a portion of the payroll taxes paid by workers and their employers. It also is financed in part by monthly premiums deducted from Social Security checks.

The Centers for Medicare & Medicaid Services is the agency in charge of the Medicare program. But you apply for Medicare at Social Security, and they can give you general information about the Medicare program.

Medical insurance (Part B) helps pay for doctors' services and many other medical services and supplies that are not covered by hospital insurance.

Medicare Advantage (Part C) plans are available in many areas. People with Medicare Parts A and B can choose to receive all of their health care services through one of these provider organizations under Part C.

What About disability benefits?

When you start receiving disability benefits, certain members of your family also may qualify for benefits on your record. Benefits may be paid to your spouse, divorced spouse, children, disabled child or an adult disabled child who is not yet 22.

If any of your qualified family members apply for benefits,Social Security will ask for their Social Security numbers and their birth certificates.

If your spouse is applying for benefits, wthey also may ask for proof of marriage, and dates of prior marriages, if applicable.

Each family member may be eligible for a monthly benefit of up to 50 percent of your disability rate. However, there is a limit to the amount that can be paid to the family.

The total depends on your benefit amount and the number of family members who also qualify on your record. The total varies, but generally the total amount you and your family can receive is about 150 to 180 percent of your disability benefit.

If the sum of the benefits payable on your account is greater than the family limit, the benefits to the family members will be reduced proportionately. Your benefit will not be affected.